The company blames its poor fortune on customers canceling their policies due to the poor economy. Oh, yeah, and the fact that both consumer groups and the Missouri Attorney General were after both Fidelis and the many competing companies operating in the St. Louis area.

Although sales have been suspended, the company says it still employs more than 200 workers — including customer-service and account-resolution agents who work with existing customers, which the company has said number more than 300,000.

Keeping most of those customers from canceling is important, but it may not be enough to keep the company viable, said Philip Jehle, the former chief financial officer and vice president of operations at US Fidelis. To survive, it needs new customers.

“If they’re not selling, there’s no revenue,” Jehle said.

Seeing people lose their jobs is always sad, but it’s hard to shed any tears for a company with a business model as shady as US Fidelis.

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If they need so many new customers to keep the company running it’s nothing but a Ponzi scheme. I guess they should have used Madoff as a consultant. And what’s going to happen to poor ol’ Rusty Wallace. They sponsor him in Nascar.

Well, it’s not QUITE the same as a Ponzi scheme, since no one but the owners of the company are expected to get anything but service out of the deal. They’re just gambling on statistics and human nature, hoping for people who buy the policy and forget to use it, buy the policy and don’t actually ever need service, or will let them get away with denying payment for service that should be covered. It’s really a form of insurance without the regulation that covers the insurance industry, and you see how much dirty pool insurance companies play even WITH regulation. Nearly everyone would be better off putting the money they pay for service policies into a bank account in case something goes wrong with the car, but everyone is afraid they’ll be the statistical outlier who has expensive problems with their new car, so they fall for the pitch.

I have no issue with US Fidelils, or companies like it. There are plenty of stupid people out there willing to believe the “too good to be true” nature that the company pitches. Everyone knows that insurance/warranty carriers will do their best to deny a payment. If you are dumb enough to trust a non-regulated company, then you deserve exactly what you get.

Seeing *productive* employees lose their jobs is sad. Seeing employees whose work is economically detrimental to society is not sad. In this troubled economy it is important to recognize the difference. Paying unemployment to someone is cheaper than paying wages, overhead, and additional business costs when there is nothing of value produced.

Good for them…is there any signs of this company being anywhere near legit? I still see ads advertising similar extended warranties though, so this isn’t going away. Just like BlueHippo disappeared but theres still other scammers filling the airwaves.